In the next few weeks, all the carriers will complete their 2008 pricing announcements. As we look at the future, its probably a good bet that these carriers rates arent going down any more than the cost of oil. So whats the impact and action plan for your business? Given the size of the increases that have been announced so far, multichannel companies need to look at all the options open to them and develop short and long-term strategies to reduce the impact.
UPS has announced that they will be increasing Ground rates by 4.9% in 2008, which is equal to last year. (FedEx will most likely match the UPS Ground increase, but that information has not yet been released.) Under new rates, the Ground commercial zone 2, 1-lb. rate has increased 5.0% over last yearoverall, a 16% increase over three years, from $3.62 in 2005 to $4.20 in 2008. For 1-70 lb. packages the average increase is 4.8%. However, if the majority of your shipments are in zones 4 or 5 like many businesses are- the increase is about 5.16%. Depending on your warehouse location and the predominant zones in which you ship to customers, the impact could be more or less than this average. Meanwhile, the Ground...
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